Friday, September 07, 2007

Perfect Storm for Real Estate Agents

“It’s a perfect storm for real estate agents,” said Glenn Kelman, chief executive of Redfin, an online brokerage in Seattle. “Not only have unprecedented numbers flocked to the profession, but at the same time you have the mortgage meltdown, the housing bubble bursting, and online competitors attacking the commission structure.”

Traditional real estate agents, who depend entirely on commissions, “are beset on all sides,” Mr. Kelman said.The number of people taking the real estate sales exam in California soared from a little more than 2,000 a month in the late 1990s to a peak of nearly 20,000 in April 2005, according to the California Department of Real Estate. But by July 2007, the number had dropped to 8,000 (see chart above). Similar patterns are seen in other states.